Shareholders' Equity (Notes)

12 Months Ended

Dec. 31, 2016

Stock-Based Compensation Expense

Total stock-based compensation expense was as follows (in thousands):



	2016		2015		2014
Stock options	$	2,281	$	2,634	$	2,125
Stock awards	9,680		7,656		4,673
Total stock-based compensation expense⁽¹⁾	11,961		10,290		6,798
Income tax benefit	3,947		3,413		2,284
Total stock-based compensation expense, net of tax	$	8,014	$	6,877	$	4,514

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⁽¹⁾ Reflects a $1.2 million benefit in 2014 related to a change in estimated forfeitures due to employee turnover.

Stock Options

A summary of our stock option activity was as follows (in thousands, except per share amounts and years):



	Stock Options		Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value ⁽¹⁾
Balance at January 2, 2016	1,388		$	18.44	5.3	$	7,366
Granted	299		19.19
Exercised	(188	)	12.21
Canceled/Forfeited	(145	)	25.71
Outstanding at December 31, 2016	1,354		$	18.70	5.9	$	7,541

Exercisable at December 31, 2016	927		$	17.40	4.6	$	6,264

Vested and expected to vest at December 31, 2016	1,315		$	18.61	5.9	$	7,442

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⁽¹⁾	Aggregate intrinsic value includes only those options where the current share price is equal to or greater than the share price on the date of grant.

Other information pertaining to options was as follows (in thousands, except per share amounts):



	2016		2015		2014
Weighted-average grant date fair value of stock options granted	$	8.85	$	15.94	$	9.33
Total intrinsic value (at exercise) of stock options exercised	$	2,088	$	4,592	$	2,478

Cash received from the exercise of stock options for the fiscal year ended December 31, 2016 was $2.3 million. Our tax benefit related to the exercise of stock options for the fiscal year ended December 31, 2016 was $0.8 million.

At December 31, 2016, there was $2.6 million of total stock option compensation expense related to non-vested stock options not yet recognized, which is expected to be recognized over a weighted-average period of 1.8 years.

During fiscal 2016, 30,500 market-based stock options were granted and had a weighted-average grant date fair value of $10.25 per option. These options are reflected in the stock option activity table above. There were no market-based stock options granted in 2015 or 2014. The assumptions used to calculate the fair value of market-based stock options granted using the Monte Carlo simulation model were as follows:



Valuation Assumptions	2016		2015	2014
Expected dividend yield	0	%	NA	NA
Expected volatility	50	%	NA	NA
Risk-free interest rate	1.8	%	NA	NA

Except for the market-based stock options discussed above, the fair value of options granted was calculated using the Black-Scholes-Merton option-pricing model.

The assumptions used to calculate the fair value of options granted using the Black-Scholes-Merton option-pricing model were as follows:



Valuation Assumptions	2016		2015		2014
Expected dividend yield	0	%	0	%	0	%
Expected volatility	50	%	54	%	58	%
Risk-free interest rate	1.4	%	1.6	%	1.8	%
Expected term (in years)	5.2		5.2		5.3

Stock Awards

Stock award activity was as follows (in thousands, except per share amounts):



	Time- Based Stock Awards		Weighted-Average Grant Date Fair Value	Performance- and Market-Based Stock Awards		Weighted-Average Grant Date Fair Value
Outstanding at January 2, 2016	454		$23.14	710		$22.01
Granted	289		19.78	347		18.84
Vested	(189	)	24.55	(52	)	24.57
Canceled/Forfeited	(24	)	21.34	(106	)	20.24
Outstanding at December 31, 2016	530		$20.83	899		$20.87

At December 31, 2016, there was $5.2 million of unrecognized compensation expense related to non-vested time-based stock awards, which is expected to be recognized over a weighted-average period of 1.7 years and $7.8 million of unrecognized compensation expense related to non-vested performance- and market-based stock awards, which is expected to be recognized over a weighted-average period of 1.9 years.

During fiscal 2014, 126,550 market-based stock awards were granted and had a weighted-average grant date fair value of $14.90 per award. These stock awards are reflected in the "Performance- and Market-Based Stock Awards" column in the stock award activity table above. There were no market-based stock awards granted in 2016 or 2015. The assumptions used to calculate the fair value of market-based stock awards granted using the Monte Carlo simulation model were as follows:



Valuation Assumptions	2016	2015	2014
Expected dividend yield	NA	NA	0%
Expected volatility	NA	NA	58%
Risk-free interest rate	NA	NA	0.9%

Repurchases of Common Stock

Repurchases of our common stock were as follows (in thousands):



	2016		2015		2014
Amount repurchased under Board-approved share repurchase program	$	125,000	$	98,446	$	45,044
Amount repurchased in connection with the vesting of employee restricted stock grants	1,693		1,755		1,448
Total amount repurchased	$	126,693	$	100,201	$	46,492

As of December 31, 2016, the remaining authorization under our Board-approved share repurchase program was $245 million. There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status. The cost of stock repurchases is first charged to additional paid-in-capital. Once additional paid-in capital is reduced to zero, any additional amounts are charged to retained earnings.

Net Income per Common Share

The components of basic and diluted net income per share were as follows (in thousands, except per share amounts):



	2016		2015		2014
Net income	$	51,417	$	50,519	$	67,974

Reconciliation of weighted-average shares outstanding:
Basic weighted-average shares outstanding	46,154		51,252		53,452
Dilutive effect of stock-based awards	748		849		741
Diluted weighted-average shares outstanding	46,902		52,101		54,193

Net income per share – basic	$	1.11	$	0.99	$	1.27
Net income per share – diluted	$	1.10	$	0.97	$	1.25

Additional potential dilutive stock options totaling 0.6 million, 0.4 million and 0.8 million for 2016, 2015 and 2014, respectively, have been excluded from our diluted net income per share calculations because these securities’ exercise prices were anti-dilutive (e.g., greater than the average market price of our common stock).